Northern Rock, the stricken UK lender that set today as a deadline for bidders to tender takeover offers, has revealed seven of its 12 directors are stepping down from the bank's board with immediate effect and chief executive Adam Applegarth will leave at the start of next year.

The entire board of Northern Rock has been under pressure to quit since the bank appealed for emergency funding from the Bank of England on September 14, which led to a run on the bank as depositors withdrew £3bn (€4.2bn) in three days. Northern Rock is thought to have borrowed more than £20bn in total from the UK central bank in the last four months.

Deputy chief executive David Baker, treasury director Keith Currie and Andy Kuipers, the bank's commercial director, are also standing down as board directors, but remain at the company and will continue in their roles, Northern Rock said in a statement. Group finance director Dave Jones will remain on the board.

Rock has appointed John Devaney, chairman of UK telecoms company Telent, and Simon Laffin, an adviser to European buyout firm CVC Capital Partners and former chief financial officer at UK retailer Safeway, as replacement non-executive directors.

Northern Rock said the reorganisation coincides "with the start of the second phase of its strategic review". The review is due to be completed by January next year, at which point Applegarth will leave the bank.

The overhaul means that nine of the 12 board directors in place at the time of the run on Northern Rock have now tendered their resignations. Bryan Sanderson, a former managing director at oil company BP, took over as chairman from Matt Ridley last month.

Sanderson said: "[Applegarth's] participation in the next phase of the strategic review is important, not least due to his extensive knowledge of the business and his ability to lead the process during this difficult period."

Related

The run on the bank called into question the roles played by the so-called tripartite agreement of the UK Treasury, the Bank of England and the Financial Services Authority, who came under fire both for failing to recognise the inherent risk of Northern Rock's business model, and for failing to act quickly enough to prevent the bank's credit problems worsening.

On October 16, the bank's leaders appeared before the powerful UK Treasury Select Committee, in which they were criticised for failing to arrange backstop facilities to provide insurance against the short-term public debt markets drying up.

Applegarth rejected suggestions Northern Rock’s board and management were to blame for the crisis, which the committee claimed involved the first run on a UK bank in 150 years, the loss of Northern Rock’s brand power, and the hoisting of the "for sale" sign over the company.

The bank has been the subject of takeover speculation since its troubles first emerged, and its advisers - The Blackstone Group, Citigroup and Merrill Lynch - set an official deadline of today for bidders to submit indicative offers.